Energy Efficiency &

New Technology Deployment in

Indian Iron & Steel Sector

S. K. JainGeneral Manager

STEEL AUTHORITY OF INDIA LIMITED

INTERNATIONAL WORKSHOP ON INDUSTRIAL ENERGY EFFICIENCY – NEW DELHI

SAIL TodayA listed company, 86% owned by GoI; one of the “Navratna” PSUs

Authorized Capital: Rs. 5000 Crore, Paid up capital: Rs 4130 Crore.

Largest Steel producer in India and 21st largest in the world (2008)

Highest ever turnover of Rs. 48,681 Crore in 2008-09 (equivalent to over $10 billion), 7% higher on YOY. (Rs. 20,481 Cr. in April-Sept. 09-10)

SAIL’s PBT was Rs 9,404 Crore and PAT of Rs.6,175 Crore in 2008-09 inspite of the economic downturn and higher input costs. (PBT Rs. 4529 Cr. & PAT Rs. 2994 Cr. in April- Sept. 09-10)

Highest PAT among all steel companies of the world in 1st half of January –June’09 (Rs. 2627 Crore)

Energy Scenario in Indian Iron Energy Scenario in Indian Iron and Steel Industryand Steel Industry

• Is the largest consumer of energy among all industrial sectors.

• Consumes about 10% of total electricity and 27% of coal used by Indian industry.

• Energy cost contributes nearly 30 – 35% of this sector’s production cost.

• Coking coal accounts for 65 – 85% of primary source of energy.

Energy Scenario in Indian Iron Energy Scenario in Indian Iron and Steel Industryand Steel Industry

• Iron making through BF route accounts nearly 70% of the total energy consumed by the industry.

• Energy is essential for economic growth and to achieve the target growth in GDP.

Crude Steel Production 2004-05

Crude Steel

Company 08-09 (Gcal/tcs)

BSP 6.50

DSP 6.50

RSP 7.09

BSL 6.73

ISP 8.27

SAIL 6.74

Tata Steel 6.59

RINL 6.77

ESSAR 5.81

ISPAT 5.21

JSW 6.70

Total 6.50-7.00

Indian Steel Industry

Source: Joint Plant Committee, Govt. of India

Major steel plants & Energy Cons. level

Energy Consumption in Indian Steel Industry

• Specific energy consumption declined by >15% in last 10 years.

• However, it is still more than World level of 4.5 Gcal/tcs

10.7

8.4

6.9

1985 1990 1995 2000 2005 2008

Year

GCal/tcs

...Contd....Contd.

High Energy Consumption in India – Why ?

• Out dated technology in older plants set up in 60s and 70s

• Inferior raw material quality

• High alumina and high alumina & silica ratio in iron ore

• High ash content in coking coal even after blending

• Low rate of recycling

Domestic installed capacity of crude steel (62.6 MT)-

2009

TATA Steel

11.2%

J SW12.5%

RINL4.8%

J SPL2.4%

Essar7.3%

ISPAT3.2%

Secondary producers

38.1%

SAIL20.5%

SAIL is the largest domestic steel player

Other IntegratedMain Producers:36.6%

India has emerged 3rd largest steel producer in the world in 9M ’09

Top 5 countries in Crude Steel Production

2008 2009

Jan-Sep’2009

Rank Country  

MT Rank Country  

MT

1 China 502 MT 1 China 420.4

2 Japan 119 MT 2 Japan 60.9

3 US 91 MT 3 India 41.74

4 Russia 68.5 MT

4 Russia 41.68

5 India 55 MT 5 United States

40.23

Source: WSA

Low High

Deficit

Excess

Ava

il-ab

ility

of

Iron

Ore

Forecasted Growth rate 2005-15

CIS Latin America

USA / Canada

Eastern EuropeEU

Japan

India

China

Other emerging Asian countries

Raw Material basin

Growth basin

Mature basin

Production sites will move to regions with both RM Production sites will move to regions with both RM source and demand. source and demand.

Skilled Human Resources

Abundant Iron Ore

Government Policy

Huge Potential for Demand

• High GDP growth rate of 8%• 1 billion population• Low per capita steel consumption of 34kg (World av. 170 kg)

Reserves 23 billion tonnes

• Stable currency• Easing of regulations• Strong Banking & judicial

system

Growth factors

for India

•Encouraging trade relations with ASEAN and other countries

• Infrastructure building• Exploring new Energy resources

Indian Potential for Steel

Future Direction : National Steel Policy - 2005

Enhance indigenous production of steel to 110 MT by 2020 from a level of 38 MT in 2005 with a CAGR of 7.3 %

Exports 26 MT by 2020, from level of 4 MT in 2004-05 with a CAGR of 13.3 %

Iron ore requirement to increase to 190 MTPA by 2020 from about 54 MTPA in 2004.

Technology/ productivity in line with global standards

Demand Side

Strengthening of delivery chain linking the producers to the users, especially rural areas

Interface between producers, designers of steel intensive products, fabricators and ultimate user

Creating awareness about steel as a cost-effective and technically efficient end-use material

Supply side

Enhanced and easy access to critical inputs – iron ore & coking coal

Expansion and improvement in quality of infrastructure – Energy, railways, ports and other means of transport

Well developed financial market with efficient financial instruments

Increased focus on R&D, training of manpower and integrated information services

Future Direction : National Steel Policy - 2005

Future Demand of Steel in India

Agency 2019-20

National Steel Policy 2005 110

Latest projection by Ministry of Steel (MoS)

+ 200

Based on MOUs signed by the private producers with various State Governments

293

Different projections for proposed capacity:

(In million tons)

Projected per Capita consumption of Finished Steel in India (kg)

Year Per Capita Steel Consumption

2011-12 48

2019-20 80

2024-25 110

2029-30 135

2034-35 175

India’s current population is - 1160 millionIt is assumed that till 2051, population would be about : 1.4 bn.

Optimistic Case

Medium

Growth

Conservative

Fin. Steel Cons.

Growth

Rate

Consum-ption

(mTpa)

Fin. Steel Cons. Growth Rate

Consum-

ption

(mTpa)

Fin. Steel Cons. Growth

Rate

Consum-ption

(mTpa)

2005-2020

7.6% 100 6.9% 90 * 5.5% 76

2020-2030

6.5% 188 5.5% 147 4.5% 118

2030-2040

5.0% 305 4.0% 217 3% 158

2040-2050

5.0% 498 4.0% 322 3% 212

GROWTH SCENARIOS

* - Also projected by National Steel Policy Estimated Steel Production by 2020 = +200 MT

Energy Saving Potential in India

Specific Energy Consumption for Steel Industry :

India: 6.9 GCal / tcs (07-08)

World: 4.5 GCal / tcs (2008)

6.9

4.5

0

2

4

6

8

10

India(Avg.)

World(Avg.)

Specific Energy Consumption, Gcal/tcs

2.4

Energy saving potential : 200x(6.9-4.5) = + 484 million GCal / yr

Energy Saving Potential in India

• To achieve this potential, Asia-Pacific partnership for clean development and climate has suggested adoption of Energy efficient “Best Available Technologies (BAT)” in

– Coke Making

– Sintering

– Iron Making

– BOF/EAF Steel Making

– Finishing

Barriers in implementing Energy Efficiency Technologies

• Focus on reducing capital cost rather than being concerned about energy input

• Difficulty in acquisition of energy-efficient technologies

• Space constraints/retrofit ability problem in adoption of clean technologies in existing set up

Barriers in implementing Energy Efficiency Technologies

• Focus on reducing capital cost rather than being concerned about energy input

• Difficulty in acquisition of energy-efficient technologies

• Space constraints/retrofit ability problem in adoption of clean technologies in existing set up

• Low rate of recycling.

Energy-efficient Technologies for Iron and Steel Making

Process Energy-efficient TechnologiesCoke making

• Coke Dry Quenching (CDQ)• Automatic Combustion Control• Automatic Ignition for Coke Oven Flare• Tall batteries and stamp charged batteries

Sinter making

• Sinter Cooler Waste Heat Recovery• Multi-slit Burners

Iron making

• Top Pressure Recovery Turbine (TRT)• Hot Stove Waste Heat Recovery• Coal Dust Injection (CDI)• Bled BF Gas Recovery

Steel making

• Bled BOF Gas Recovery• BOF gas Sensible Heat Recovery

Casting • Continuous Casting replacing Ingot Casting• Thin Slab Casting / Near-net-strip Casting

Rolling • Walking Beam Furnace• Reheating Furnace Waste Heat Recovery

RESOURCESAbundant Iron Ore reservesStrong Managerial skills in Iron and Steel makingLarge pool of skilled Man-powerEstablished steel players with strong skills in steel making

Pro-active stance of Govt.Encouragement for overseas investments

High economic growth driven increasingly by industryFaster UrbanisationIncreased Fixed Asset BuildingAutomobiles and component industry growth

OPPORTUNITIES

POLICY

To Conclude..

Indian steel industry has a bright future

To Conclude…

• At this juncture, when demand for steel in India is fast growing to meet domestic and global demand, energy efficiency is the only option to counteract the associated maladies.

• However lack of financing capabilities as well as lack of incentives impede the implementation of such measures.

• Sectoral policies to be developed to promote such incentives

• Policy strategy would consists of mix of regulatory and price based incentives

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